Co-Founder, Coastal Financial Partners Group, California
Being rated for life insurance means that your risk profile is greater than average. You are still insurable but at a different rate.
Life insurance rates are calculated assuming average health and lifestyle and organized into standard rate sets specific to age, gender, tobacco use. If you have a medical condition that affects the underwriting process, you may qualify at a higher rate. Factors are applied to the rate table called table ratings (and, sometimes, flat extra ratings) which adjust the premium you pay so that it is appropriate for your risk profile.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
What does it mean to be rated for life insurance? Being rated means you have a health condition that doesn't exclude you from coverage (declined), but ads additional cost to the policy. Also known as "table rated" a person could be rated along a range of levels (tables) for an illness depending on their individual situation. A great example of table rating is diabetes. When I started 25 years ago, Diabetics were a straight decline for life insurance. No chance. Over the years, as treatment and severity of Diabetes changed, came a "range" of health levels that Diabetics can display. There are diabetics who have become healthier than the general population and there are Diabetics who every day struggle with control of thier illness. The insurance industry has figured out these two are not the same individuals health wise. A person with well controlled diabetes may fall into normal class range or low table rates, while a person with less control of their diabetes would be higher on the tabe rates.
Being rated for life insurance means that your life insurance will have "table ratings" added onto it due to one or more risk factors in your life (a moderately serious health condition or fairly recent alcohol treatment are two examples of ratable risk factors). Each table rating usually adds 25% of the Standard premium back onto the Standard premium. E.g. If the Standard premium is $1000 per year, a policy rated Table 2 would cost $1,500 per year, or 150% of Standard.
This is a very loose explanation, not taking into account policy fees and the fact that some companies charge a different % for their table ratings, or add the % on a rating other than Standard. These variations can cause a wide range of prices among policies of the same table rating, and why it is especially important to shop among several carriers when you have a ratable condition.
Most companies end table ratings at table 8 for Term life insurance. Sometimes a person who is unable to get Term can get Permanent insurance, as some permanent policies will allow more risk.
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Life insurance rates are calculated assuming average health and lifestyle and organized into standard rate sets specific to age, gender, tobacco use. If you have a medical condition that affects the underwriting process, you may qualify at a higher rate. Factors are applied to the rate table called table ratings (and, sometimes, flat extra ratings) which adjust the premium you pay so that it is appropriate for your risk profile.
This is a very loose explanation, not taking into account policy fees and the fact that some companies charge a different % for their table ratings, or add the % on a rating other than Standard. These variations can cause a wide range of prices among policies of the same table rating, and why it is especially important to shop among several carriers when you have a ratable condition.
Most companies end table ratings at table 8 for Term life insurance. Sometimes a person who is unable to get Term can get Permanent insurance, as some permanent policies will allow more risk.